Hyundai Europe said improved productivity is the prime reason why its redesigned i10 will offer buyers better value for money.

The new model will go on sale in the UK early next year priced from GBP8,345, the price charged for the current entry version. Yet the newcomer, built on a new platform, is bigger, roomier, safer and - in most cases - better equipped.

True, the base model no longer has standard air conditioning but does have more airbags. Quality is also claimed to be substantially improved. Hyundai is billing the new i10 as an "A to B" car - A segment pricing with the features and equipment of a model from the class above.

Higher up the range there are price rises of up to GBP400, but there is increased standard equipment which, Hyundai claimed, would cost buyers 10-15% more if bought as individual items.

European versions of the new i10 will be built in Turkey while the outgoing model was made in India. The capacity of the Turkish plant has been increased from 120,000 units a year to 200,000 to make this possible.

India will build its own version of the newcomer, called the Grand i10, purely for local sale. The new platform will also be used for the next Kia Picanto, the i10's sister model.

This will give the Hyundai-Kia group the economies of scale which make zero or minimal price increases for the new i10 feasible, Hyundai UK president and CEO Tony Whitehorn said.

The UK is the leading market in Europe for the i10, with annual sales which have never dipped below 20,000.

"We are in the top two or three in the A segment. My aim with the new model is to sell about 20,000 next year and extend the appeal of the car," added Whitehorn.

Sales of the previous model were helped by the government's scrappage scheme in the wake of the 2008 banking crisis. This gave buyers up to GBP2,000 if they traded in a used car at least 10 years old. But Whitehorn is not expecting those scrappage buyers to trade in for the new model.

"They are people who keep their cars 10 years," he said. "We haven't even seen them for servicing - they go to the same garage down the street that they have always gone to."

Instead, Whitehorn expects the financial product payment protection insurance 'mis-selling' compensation windfalls, currently being paid out to many families, along with attractive PCP deals, to boost sales of the new car.

"This is a fantastic time to buy a brand new car. There are some fantastic deals throughout the industry and we are part of that competitive set. Consumer incentives have increased by around 20% year on year," he said.

Hyundai expects to have sold between 77,000 and 80,000 cars in the UK by the end of the year compared with 74,000 in 2012 - despite initial forecasts that 2013 would be a year of consolidation.

But the recession in parts of Europe has freed up production for the UK, Whitehorn said. "We are getting extra cars from Europe. What we are experiencing is being experienced by all other manufacturers."